Internet banking is an easy way to electronically transfer money from one account to another, but it’s important to get the BSB and account number right, because banking systems only use the account number when processing the payment. The account name is not used to transfer the payment.
It is important to check (and double check) the account number when entering it in your internet banking system.
If you do enter the wrong account or BSB number the payment can be made to the wrong account (unintended recipient). This is known as a “mistaken internet payment”.
Under the New Payments Platform, money will only be deposited if it’s sent to an account with matching BSB and account numbers. If they don’t match, the money will bounce back to your account, but it could potentially go to a valid account.
If you have made a mistaken internet payment, you need to contact your bank or credit union immediately. The chance of recovering the money decreases the more time goes by.
Your bank or credit union will then contact the unintended recipient’s bank to try to get the money back. If the money is still in the other person’s bank account and it’s a genuine mistake (because the account name and number do not match), then the process for recovering the money depends on how quickly you have reported the mistake to your bank.
Under the ePayments Code administered by ASIC, there is a process that will help. If you report the mistake:
- Within 10 business days: the funds will be returned to you.
- Between 10 business days and 7 months: the recipient’s bank will freeze the funds. The recipient will then have 10 business days to show they are entitled to the funds. If they do not, the funds will be returned to you.
- After 7 months: the funds will only be returned if the other person agrees.
If the money is not in the other person’s account when the receiving bank is notified, then the receiving bank must make a reasonable attempt to get the money back. For example, by negotiating with the unintended recipient to repay the funds.
If your bank or credit union does not help you to fix the mistaken internet payment, you can lodge a dispute with the Financial Ombudsman Service Australia.
BPAY payments are not covered by the ePayments Code as BPAY uses a different process to resolve mistaken payments.
If you, or someone you authorised, did not make the transfer, then it may be an unauthorised transaction, as opposed to a mistaken internet payment. While unauthorised transactions are also dealt with under the ePayments Code, the process for resolving this issue is different. If you believe an unauthorised transaction has taken place, notify your bank immediately.
For further information, please contact McKillop Legal on (02) 9521 2455 or email email@example.com
This information is general only and is not a substitute for proper legal advice. Please contact McKillop Legal to discuss your needs.